Build a unified database: A unified customer database enables publishers to reduce marketing costs, build customer relationships, and increase ad and list revenue

Folio: The Magazine for Magazine Management, Jan, 2002 by Robert Mckim

For years, I've been encouraging publishers to combine their independent subscriber databases into a unified customer database, and it's beginning to look as if more and more are moving in that direction.

The unified customer database comprises all activities and sources associated with a customer during the lifetime of that customer's interaction with the publishing company. It includes data such as name, address, city, state, Zip, transaction information, response information, customer-service interactions, inquiry information, responses to promotions, Web responses to newsletters, and event attendance. Having all this information in one database allows publishers to trim costs, build better relationships with their readers and generate additional revenue.

THE NEED IS THERE

Several factors--financial pressures, the ongoing need to strengthen customer relationships and the advent of the Internet among them--have contributed to this trend toward database integration. First, it gives publications the ability to manage their costs better--from the standpoint of customer interaction as well as marketing expenses. Publications, depending on their size, can cut these marketing or customer management costs anywhere from 5 to 30 percent. And a valuable by-product of efficiently managing customer data is being able to produce better quality lists.

Second, publishers always need to improve and build on their relationships with their readers. Data integration will help magazines become more relevant and timely in their customer service and marketing interactions with their readers, thus increasing reader loyalty and building a stronger relationship.

Third, publishers are increasingly involved in Internet-based customer communication and interactions--which are greatly facilitated by a unified customer database. When subscribers re-subscribe online, for example, a publication can cut costs by between $5.50 and $17 per re-application because it is not necessary to enter the data on a paper form. And if the subscriber, rather than a third party, provides the data, there is less likelihood of mistakes.

In addition, the Internet allows publishers to deliver electronic newsletters and other communications at highly reduced costs: two to five cents per message as opposed to 30 to 40 cents for mailing fees.

Fourth, the trend of mergers and acquisitions, particularly in the b-to-b space, has heightened the need to integrate customer information. A unified customer database is essential if the merged companies are to use the data effectively.

Finally, to provide advertisers more value, publishers must give them the ability to generate additional revenues. By overlaying advertisers' lists on top of a publication's list, for example, a publisher can show advertisers why they should advertise more frequently in the publication. To do this, a publisher must have a unified database.

PULLING THE DATA TOGETHER

Integrating data from disparate databases is a complex process. But knowing the elements that comprise a successful integration will make the process more efficient and effective. Here's a look at the seven basic steps involved in such an integration.

* Start by being a "data detective" and perform a needs-assessment. In this assessment, identify all the databases to be integrated, find out who created each one, and gain an understanding of the various platforms and data formats.

* Prepare for the actual process of data integration by developing a new database that can accept information from various other databases' field formats.

* Standardize the data. Because different databases have different conventions for each field, make sure that the customer information fields match. For example, you would want change all references to the word "Street" to "ST," and ensure that all the state identifications are standardized.

* Perform a National Change of Address, or NCOA. The Postal Service usually keeps data for about 30 months on people who have changed locations or moved, and the NCOA ensures that all the addressing information is correct and up-to-date. This is primarily done with consumer publications.

* Household, or "de-dupe," the data. Because this step requires a good bit of technology and experience, it is usually conducted by outside service bureaus. This process takes various entries in different files--for example, Robert C. McKim, Robert McKim, Bob McKim, and R.C. McKim, which may or may not be at the same address locations or companies-and eliminates duplicate entries. This is a technological process: algorithms comb through the data, recognize similarities, and get rid of duplicates.

* Append the addressing information to existing transaction or promotional information. You may also want to append data from third- party sources to provide a more robust picture of a particular record.

* Finally, the data goes into a unified customer database that has been built specifically to manage the data that has been standardized, "householded," and appended. It allows the data to be served to the user accurately and routinely. Using Online Analytical Processing tools, one can now extract certain parts of the data based on criteria selected for marketing purposes.